Shares continue on steady road to recovery

Rio Tinto showed just how hard it is to make money during a recession as it posted net earnings down 65% to $2.5bn for the half year.

Chris Bradshaw
shareprices.com - Thursday, August 20, 2009

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Rio Tinto

It blamed a slump in demand for commodities and falling prices.

Despite this the share price rose as it confirmed it was on schedule to meet full year commitments made last December. Mining stocks rose on sentiment but none more so than the niche miner Eurasian Natural Resources which is now trading well above their 2007 issue price of 540p. At 23 times earnings, shares are rated as overvalued by The Times who rates them a "sell".

British Land suffered the wrath of investors as the hopes of a takeover faded. Shares fell again as investors took profits after first quarter results were announced. Fellow property company Hammerson, a key investor in European shopping centres, saw share price hold firm following strong gains in July. Recent falls were attributed to the stock going ex-dividend.

Drinks group Diageo shares fell after ING dropped their outlook to "hold" from "buy". The broker expects year end results to beat consensus forecasts but still reduced their share price target to 956p from 970p.

Consultancy and outsourcing business shares are starting to gain value as the recession appears to be slowing. Morgan Stanley rates Experian, Hays and Rentokil Initial whilst Investec rates IT consultancy Morse as a "buy" following a collapse in talks aimed at a takeover. It says that there is 'material upside' provided they continue to rebuild after the recent distractions.

 

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